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Settlement Reached In Alcoholic Energy Drink Suit

BERLIN — Nearly four years after a state and local outcry over the marketing of high-octane alcoholic beverages to young adults in the area and across the nation, the Maryland Attorney General’s Office this week announced a settlement had been reached with one of the main culprits, including a financial payout and an agreement to change the focus of its target audience.

For the last few years, so-called Alcoholic Energy Drinks (AEDs), distributed under names like “Four Loko” and “Joose” for example, have been marketed to young adults across the country with often disastrous and even fatal results. AEDs are alcoholic beverages to which copious amounts of caffeine and other stimulants have been added when they are produced. Packaged and sold in 23.5-ounce cans resembling energy drinks with flavors such as fruit punch, lemonade and watermelon, for example, some of the beverages contain the alcohol equivalent of five or six beers and the caffeine equivalent of four or five colas to two cups of coffee.

Because of the combination of alcohol and caffeine, and the attractive packaging that suggests the beverages are merely energy drinks, the AEDs including Four Loko became increasingly popular with young people, but the consumption of the AEDs resulted in numerous deadly accidents and other incidents. The issue came to a head locally in 2010 when a 23-year-old St. Michael’s woman lost her life after consuming two cans of Four Loko at a party before crashing a pickup truck into a telephone poll.

The fatal accident spurred state and local officials to seek a ban on the popular high energy, high alcohol content beverages. Maryland Comptroller Peter Franchot called for an immediate ban on AEDs in the state and locally, Ocean City and Worcester County officials began exploring legislation to prohibit the proliferation of the high energy alcoholic beverages, similar to the efforts they had undertaken with other prolific stimulants such as Salvia and K-2.

As a result, Maryland Attorney General Doug Gansler joined his counterparts in 19 other states in a suit against Phusion Products, the company the produces and distributes Four Loko. Nearly four years later, Gansler’s office announced this week a settlement had been reached in the case with Phusion Products agreeing to resolve allegations that the company marketed and sold Four Loko to underage persons, promoted dangerous and excessive consumption, boosted the misuse of alcohol and failed to disclose to consumers the effects and consequences of drinking alcoholic beverages combined with caffeine.

“AEDS attract young people who wrongly believe that the caffeine will offset the intoxicating effects of the alcohol,” said Gansler when the suit was filed. “In fact, the caffeine in these products only mask, not offset, alcohol intoxication.”

As part of the agreement announced this week, Phusion has agreed to not manufacture caffeinated alcoholic beverages and reform how it markets and promotes its other products. For example, Phusion has agreed not to promote binge drinking, drinking while driving, consuming alcohol by means of rapid ingestion technique or device and underage drinking. The company has also agreed to refrain from hiring underage actors or models to market their products to young people. Phusion has also agreed to pay the Maryland Attorney General’s Office and the other attorneys’ general officers involved a $400,000 settlement, although Gansler said the monetary settlement is less important than the other components.

“The combination of alcohol and caffeine poses serious, potentially fatal risks,” he said. “The lasting impact of this settlement will be measured by its health benefits, not the amount of money recovered.”